In my search for some articles about President Obama’s Student loan plan, I found a rather interesting article on the Huffington Post discussing many students’ loans and the amount of money they are putting into their education or the cost of a “percentage of the information in [their] head." The article that follows many students is titled “Majoring In Debt”; debt has become the most significant part of the millennial student’s education. Not only is there a struggle to keep up with day-to-day survival, but also adding on the burden of that the necessity to pay student loans, brings many to their knees. The images of students holding up pieces of cardboard boxes like someone peddling money on the side of the road is an image I don’t have to imitate.
The Huffington Post reports that $24,000 is the average American student debt, but as many of the students show on the website, that is a very tiny number. The amount of money used for education, which is quickly deteriorating in quality, is becoming a misery to deal with and is one of the top reasons as to why some students just decide not to continue the pursuit in higher education.
The lack of growth in the financial sector, jobs and all opportunities in general, have unbelievably become a societal norm. The need and desire for education leads the current students into a further lack of income, which prolongs the cycle of debt and deficit. Statistics have shown that the greater woe the Federal economy is undergoing the student will make a choice of continuing in school. Thus guaranteeing them some sort of stability. Unfortunately as stated by some of the students this stability also brings a stable payment after school is over.
The eligibility and availability of scholarships or grants has become more and more strict. Many students no longer attempt to receive federal grants or understand the process to do so because their parents “make too much money.” The basis of parent and student’s tax information often does not represent exactly what the student can contribute. The Expected Family Contribution takes everything into consideration except reality. The “family’s financial strength” is what is considered when calculating EFC which includes the number of people enrolled in college. But when it comes down to the independent student, this number could be slightly skewed and personal survival is not taken into account.
Many of the students “majoring in debt” implore to others to explore all options for their education including long distance learning as well as community colleges before making that “investment” in their education. Many of the students holding up their signs also have noted under the amount they owe that the number will increase as they are still in school. The effects are for all traditional and non-traditional students, undergraduates and scholars alike.
http://www.huffingtonpost.com/2011/09/06/majoring-in-debt-college-_n_951129.html
http://www.huffingtonpost.com/2010/02/22/college-debt_n_471023.html#s69880&title=Charlie_Preston_30
http://www.collegeboard.com/student/pay/scholarships-and-aid/409.html
Count me in...I am majoring in debt. Although I rarely even think about bringing this up when I tell folks I am pursing a PhD this blog and the links really challenge me.
ReplyDeleteI clicked on the majoring in debt link and found myself confused as to while some of these folks are smiling holding signs that say they owe $80,000. However, am I or we any different? As we pursue our graduate degrees I imagine we all think (I could be wrong) that we will get a better paying job and possibly our dream jobs. But lately I wonder. How do we know? I assume a position will be available when I graduate and that I will be able to get the endorsements needed to achieve an upper level position in higher education but as some of the stories shared that does not always happen.
I see and believe in the value and purpose of education and truly believe all should have access who desire to attend but at what cost. Am I selling debt? I encourage education but also do not think everyone should go to college. I believe those who really desire higher education should pursue college. It is not a place to extend adolescents especially not at $10,000 plus a year. Although, I could argue that it was the decision of these students to accept this debt it is hard for me to reconcile this idea when a student can sign for a $20,000 loan but not buy a eight dollar pack of beer.
I am no different from the students holding those signs. I am graduate student in debt (there are many of us) hoping my advanced knowledge and skill gets us our version of success with an unfortunate bonus of monthly payments until we are 50.
One class every incoming student should take is personal finance. We talk a lot about money, but often students do not realize the financial burden until they come to college and bills start adding up. I find it challenging that students have to list their parents when filling for financial aid when some parents are not even in the picture of helping pay towards their education. It would be hard to see the value of college when you are making money or have a job off campus struggling. I am thankful for the many on-campus positions we can provide to students in helping them to stay on campus and be more engaged. The resident assistant position is one of these great positions which help to cover room and board expenses. The visual of students holding signs of how much they owe has stayed with me. Education has a place and should cost something, but it should not put people in hardship to start life after college. How does one get a mortgage, a car loan, etc. with such debt? It just seems like a hard way to start off life after having such a happy ending of finally graduating from college. A privilege and accomplishment should not be subsided with a major in debt.
ReplyDeleteI am very sympathetic to Vicky, Karla, Katee, and Ann's comments, as I have had to take out some student loans to cover the cost of this program while my wife continues to hunt (online and over the phone from Hawaii) for gainful nursing employment here in the Front Range area.
ReplyDeleteIt's not only students who make significant financial decisions without clearly thinking through the ramifications; as a loan officer and loan manager for a decade during the Bubble Economy days, I came across literally thousands of home loan applications from around the country that practically trumpeted a lack of financial awareness....10K in the bank, just enough money to live decently month to month but unable to weather any kind of financial crisis...both adult borrowers working fulltime, and at least one at reasonable risk of losing their job in the future if the bubble ever burst...these were the folks buying $300K to $1 million homes, or using their currently owned homes as ATMs....
Thing is, our entire economy is designed to encourage reckless borrowing, whether it be via home loans, credit cards, auto loans, or student loans. Indeed, the very health of our national and regional economies is measured first and foremost by the Gross Domestic Product (GDP) metric, that is designed to value mindless consumption, not balanced & sustainable spending (in fact, to most economists, spending too much is anathema to a healthy economy; spending and consuming is what matters). Our sales people in the vast majority of organizations-public and private-are inculcated on a regular basis in "bigger is better" thinking, training and acting.
The more than $1 trillion in national student loan debt that has now accumulated makes one wonder if college is really worth the investment, as many question these days. I truly believe that it is (it is even more difficult on average to obtain a job as a high school dropout or high graduate than as a college graduate), but believe a low-cost junior/community college option would be a better place to launch a college career for hundreds of thousands of college students who instead opt for much pricier four-year educations. You can always transfer, and meanwhile get general ed. requirements out of the way, work on your deficient academic skills, get acquainted with higher education culture to some extent, and gain insight into what you really want to major in...
CORRECTION: Dear reader, I meant to write "in fact, to most economists, saving too much is anathema to a health economy...", instead, of "spending too much".
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